Criminal Justice News

Wednesday, January 22, 2014

Three Georgia Men Charged in Alleged Widespread Corruption Schemes at Local Military Base

Three Georgia men have been charged in a 51-count indictment for
their alleged participation in fraud and corruption schemes at the
Marine Corps Logistics Base (MCLB) in Albany, Ga., resulting in the loss
of millions of dollars to the United States government.

Acting Assistant Attorney General
Mythili Raman
of the Justice Department’s Criminal Division and U.S. Attorney Michael
J. Moore for the Middle District of Georgia made the announcement after
the indictment was unsealed in the Middle District of Georgia today.
Christopher Whitman, 48, co-owner of United Industrial of Georgia Inc.
(also known as ULOC),
an Albany-based trucking company and freight transportation broker
, was indicted on 43 counts of money, property and honest services wire
fraud, five counts of bribery and one count of theft of government
property.
Shawn McCarty, 36, of Albany, a former employee at the
MCLB-Albany, was charged with 30 counts of money, property and honest
services wire fraud and one count of bribery; and Bradford Newell, 43,
of Sylvester, Ga., also a former employee at the MCLB-Albany, was
charged with 13 counts of money, property and honest services wire
fraud, one count of bribery, and one count of theft of government
property.

The three men were arrested earlier today and appeared before U.S. Magistrate Judge Thomas Q. Langstaff.
Judge Langstaff ordered the three men detained pending further hearings next week.

According to the indictment, Whitman paid nearly $1 million in bribes to
Mitchell Potts, the former traffic office supervisor for the Defense
Logistics Agency (DLA) at MCLB-Albany, Jeff Philpot, the former lead
transportation assistant in the traffic office, and Shawn McCarty,
another transportation assistant in the traffic office, to obtain
commercial trucking business from the DLA.
The indictment alleges that Potts, Philpot and McCarty used
their official positions to defraud the government and benefit ULOC by
helping ULOC obtain transportation contracts loaded with unnecessary
premium-priced requirements – including expedited service; removable
gooseneck trailers, which do not require a loading dock and are
therefore more expensive than standard trailers; and exclusive use,
which requires that freight be shipped separately from other equipment –
even if that results in a truck not being filled to capacity.
The indictment alleges that Whitman and ULOC brokered these
shipments for service without the premium specifications and on fewer
trucks than requisitioned by DLA, but they billed the government at
rates approved by the corrupt officials.
These actions are alleged to have resulted in ULOC profits grossing more than $20 million over less than four years.

Whitman is accused of orchestrating a scheme to steal and sell surplus equipment from MCLB-Albany worth more than $1 million.
Whitman allegedly paid approximately $200,000 in total bribes
to Shelby Janes, the former inventory control manager of the
Distribution Management Center (DMC) at MCLB-Albany, and Newell, an
assistant to Janes, who used their official positions to help Whitman
steal surplus equipment from the base, including bulldozers, cranes and
front-end loaders.
The indictment alleges that Whitman improved and painted the stolen equipment.

An indictment is merely a charge and the defendants are presumed
innocent unless and until proven guilty beyond a reasonable doubt in a
court of law.

If convicted, the defendants face up to 20 years in prison for each wire
fraud count and 15 years in prison for each bribery count.
The theft count carries a maximum prison term of 10 years.
Each charged count carries a maximum fine of $250,000 or twice the gross gain.

Prior to this indictment, one former ULOC employee and three DLA
officials pleaded guilty in connection with the fraud and corruption
schemes alleged in the indictment.
On Oct. 10, 2013, Kelli Durham, ULOC’s former manager, pleaded
guilty to conspiracy to commit wire fraud, admitting to intentionally
overbilling the United States for services ULOC did not perform,
resulting in losses ranging from $7 million to $20 million, and for
receiving $905,685 for her role.
She faces a maximum penalty of five years in prison.
In May 2013, Potts and Philpot pleaded guilty to bribery for
collectively accepting more than $700,000 in bribes; and in February
2013, Janes pleaded guilty to bribery for receiving nearly $100,000 in
bribes.
The three former officials each face up to 15 years in prison.
The case is being investigated by the Naval Criminal Investigative
Service, with assistance from the Dougherty County District Attorney’s
Office Economic Crime Unit, Defense Criminal Investigative Service, DLA
Office of the Inspector General, and the Department of Labor Office of
the Inspector General.
The case is being prosecuted by Trial Attorneys Richard B. Evans and
J.P. Cooney of the Criminal Division’s Public Integrity Section and
Assistant U.S. Attorney K. Alan Dasher of the Middle District of
Georgia.